News Corp (NWS) Q4 2017 earnings summary

Executive summary

• FY2017 revenue was $8.139B, down 2% YoY; Segment EBITDA rose 29% to $885M, while continuing operations swung to a $643M loss from $235M income.

• Profitability was burdened by $927M in impairment and restructuring charges, including $785M of non-cash impairments, and a $227M non-cash write-down of the Foxtel investment.

• Digital Real Estate Services remained the growth engine; print advertising weakness and foreign exchange weighed on News and Information Services revenue.

Financial highlights

• Revenue declined $153M YoY to $8.139B; print advertising weakness, currency impacts and the prior-year extra week were partly offset by digital real estate growth and acquisitions.

• Net loss attributable to shareholders was $738M versus net income of $179M; diluted loss per share was $1.27 versus earnings per share of $0.30.

• Continuing-operations loss was $643M versus income of $235M; the comparison included $785M impairment charges and $142M restructuring charges in FY2017.

• Segment EBITDA increased $201M, or 29%, to $885M; FY2016 included a $280M NAM settlement charge and $122M Zillow settlement gain.

Outlook and guidance

• Digital property markets were viewed as early in their evolution, with expectations for many more years of audience and revenue growth at realtor.com®.

• Risk and Compliance revenue rose over 20% for FY2017, with nearly 30% YoY growth in Q4; higher growth was expected in FY2018.

• Dow Jones reorganization was expected to reduce costs by ~$100M annualized by the end of FY2018.

• Foxtel combination with FOX SPORTS Australia was expected to unlock value and align ownership and management; the parties announced their intention in August 2017.